Northern Rock chief tackled in boardroom over his private life

The boss of beleaguered Northern Rock was confronted in the boardroom about sensitive allegations concerning his private life.

The claims were formally put to outgoing chief executive Adam Applegarth, 45, by his fellow directors because, if they had been proved true, he would have been in breach of company rules.

"It was a hell of a thing to have to put to your boss," said one highly-placed source within the group.

It is understood the damaging allegations, which The Mail on Sunday cannot disclose for legal reasons, were detailed in an anonymous letter received by the board last year as the bank headed towards meltdown.

At the same time, a similar letter was sent to Mr Applegarth's wife Patricia at their £2.5million home in the village of Matfen, Northumberland.

The main allegations contained in the letter were put to Mr Applegarth by his then deputy, David Baker, in the presence of other directors.

One source said: "As is common with aggressive young men, he is not well liked. And there was a degree of jealousy too, due to the fact that technically he was very good at his job."

Mr Applegarth and his wife both declined to speak to this newspaper about the allegations.

We also put a series of questions to Northern Rock but a spokesman said: "Northern Rock does not, and will not, comment on personal matters relating to its employees."

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Under fire: The Northern Rock crisis prompted the first run on a British bank in the 21st century

The company was plunged into crisis two months ago when it emerged it was over-exposed to the squeeze with highrisk mortgages in America and needed a loan from the Bank of England.

That caused a run on deposits with queues at branches nationwide and Chancellor Alistair Darling was forced to step in to guarantee customers' deposits.

Banks fearful of the American effect became more cautious about lending to each other, crippling Northern Rock.

Mr Applegarth will walk away with a pension pot worth £2.2million and, possibly, an extra £380,000 because he is entitled to six months' salary even though he resigned of his own volition.

Last year Mr Applegarth earned a total package of £1.4million, including basic pay of £690,000 and a bonus of £660,000. He agreed to stay on until the end of January while the company conducts an auction process. He could leave sooner if the mortgage lender's future is secured.

Mr Applegarth joined the firm in 1983 as a graduate trainee. Quickly rising through the ranks, he became chief executive in 2001.

That appointment meant he became the youngest FTSE 100 chief executive at 39 - a feat he says is his greatest achievement.